prodchem
Jun 30, 2026
The first half of 2026 highlighted how quickly geopolitical tensions can reshape global shipping economics. One of the clearest examples was the sharp increase in war risk insurance premiums, particularly for vessels transiting high-risk maritime regions. For importers, exporters, commodity traders, and procurement teams, these additional insurance costs became a significant component of total landed cost.
While standard marine insurance covers routine shipping risks, war risk insurance provides protection against losses arising from war, terrorism, piracy, civil unrest, and other conflict-related events in designated high-risk areas. During periods of heightened geopolitical uncertainty, premiums can rise dramatically, affecting freight rates, procurement budgets, and supply chain planning.
This H1 assessment reviews how war risk insurance evolved during the first half of the year, why premiums surged from around 0.125% to several times their normal levels on some routes, and what buyers should monitor moving into H2.
War risk insurance is an additional policy purchased when vessels operate through regions considered to have elevated security risks. Marine insurers regularly assess geopolitical developments and adjust premium rates according to the perceived level of threat.
Premiums may increase due to:
Armed conflict.
Missile or drone attacks.
Piracy incidents.
Political instability.
Military activity affecting shipping lanes.
Threats to commercial vessels.
These additional insurance costs are often passed on to cargo owners through higher freight charges or emergency surcharges.
The first half of 2026 saw considerable attention on maritime security and insurance costs. Periods of heightened geopolitical tension prompted insurers to reassess risk exposure, resulting in temporary increases in war risk premiums for vessels operating through sensitive trade corridors.
Key developments included:
Increased insurance premiums on selected shipping routes.
Higher freight costs due to additional risk surcharges.
Greater use of alternative shipping routes by some carriers.
Longer transit times in certain trade lanes.
Increased focus on supply chain risk management by global importers.
Although premium levels fluctuated throughout H1 as geopolitical conditions evolved, they remained an important consideration for international procurement teams.
In normal market conditions, war risk premiums represent only a small percentage of a vessel's insured value. However, during periods of elevated geopolitical risk, insurers may substantially increase premiums to reflect the higher probability of claims.
Several factors contributed to higher premiums during H1:
Escalating geopolitical tensions increased the perceived operational risk for vessels traveling through designated high-risk areas.
Insurers adjusted pricing to reflect the possibility of vessel damage, cargo loss, or operational disruption.
Premium increases varied by shipping corridor, depending on local security conditions and threat levels.
Shipowners also incurred additional expenses related to security measures, route planning, and crew safety, contributing to higher freight charges.
Higher war risk insurance premiums affected procurement strategies across multiple industries.
Additional insurance charges contributed directly to higher import costs, particularly for bulk commodities and containerized cargo.
Some shipping companies diverted vessels to avoid high-risk regions, increasing transit times.
Rapid changes in insurance pricing made it more difficult for procurement teams to forecast logistics expenses accurately.
Buyers and suppliers increasingly reviewed Incoterms, freight responsibilities, and risk-sharing arrangements to manage cost exposure.
As geopolitical uncertainty remains a factor, procurement professionals should strengthen their logistics planning.
Stay informed about changes in maritime security conditions and insurer risk assessments.
Include insurance surcharges, freight costs, customs duties, and transit times when comparing supplier quotations.
Where practical, explore alternative shipping routes or ports to reduce exposure to high-risk corridors.
Regular engagement with freight forwarders, carriers, and insurers can provide early visibility into changing shipping conditions.
Maintaining diversified suppliers and appropriate inventory levels can reduce the impact of unexpected transportation disruptions.
War risk insurance premiums are expected to remain closely linked to geopolitical developments throughout the second half of 2026. If maritime security conditions stabilize, insurance costs may gradually normalize. However, any escalation in regional conflicts or threats to commercial shipping could lead to renewed premium increases and higher freight costs.
Procurement teams should continue monitoring both insurance market developments and broader logistics trends to maintain cost control and supply continuity.
The first half of 2026 demonstrated how rapidly geopolitical events can influence global shipping costs through higher war risk insurance premiums. Although premium increases varied across regions and time periods, they reinforced the importance of incorporating insurance expenses into procurement planning and landed cost analysis.
Organizations that monitor shipping risks, maintain close collaboration with logistics partners, and adopt flexible sourcing strategies will be better positioned to manage uncertainty and protect supply chains throughout H2.
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